NEW YORK – Oil prices fell Friday after the government reported a sharp drop in the unemployment rate, which helped boost the dollar against foreign currencies.
Benchmark West Texas Intermediate crude for March delivery fell $1.25 to $89.29 per barrel on the New York Mercantile Exchange. In London, Brent crude lost $1.80 at $99.96 per barrel on the ICE Futures Exchange.
The Labor Department said the unemployment rate dropped to 9 percent in January, the lowest level in nearly two years. Part of the drop came from unemployed workers who gave up looking for jobs. The government doesn't count them among the jobless.
The dollar rose against foreign currencies like the euro, on the positive economic news. That helped push down oil prices, according to analysts. Oil and other commodities are priced in dollars. That makes oil more expensive and less appealing to buyers holding those foreign currencies.
Meanwhile, tens of thousands of protesters continued to challenge Egyptian President Hosni Mubarak despite bloody skirmishes with pro-government groups. On Friday they packed into central Cairo and repeated calls for his ouster.
Experts say the conflict likely won't affect oil and natural gas shipments through the Suez Canal. Still, oil traders say they're concerned that the uprising could destabilize the region and perhaps spread to oil-rich countries like Saudi Arabia.
At the pump, retail gasoline prices climbed nearly 1 cent overnight to a national average of $3.124 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 4.7 cents more expensive than a month ago and 46.5 cents more expensive than a year ago.
In other Nymex trading for March contracts, heating oil fell 5 cents to $2.7188 per gallon and gasoline futures dropped 6 cents to $2.4450 per gallon. Natural gas lost 2 cents at $4.314 per 1,000 cubic feet.